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2021 (2) TMI 645 - HC - Income TaxDeduction claimed u/s 80IA(4)(iv)(c) - expenditure required to be capitalized or not - nature of expenditure on renovation and modernization in the books of accounts - substantial renovation and modernization of existing network of transmission or distribution lines - HELD THAT:- In the instant case, the assessee had undertaking substantial renovation and modernization of existing lines which is more than 50% of the book value of assets as on 01.04.2004 as per explanation to Section 80IA(4)(iv)(c) of the Act. Thus, it can safely be inferred that the assessee has undertaken the works towards renovation and modernization of existing transmission or distribution lines. It is pertinent to note that there is no requirement of capitalization of the amount in the books of accounts mentioned in Section 80IA(4)(iv)(c) of the Act. It is pertinent also to note that Section 80IA(4)(iv)(c) of the Act does not mandate that there has to be increase in the value of plant and machinery in the books of accounts. Therefore, such a requirement, which is not prescribed in the language of the provision cannot be read into it. MAT Applicability section 115JB - Issue already been answered by this court in 'COMMISSIONER OF INCOME TAX VS. ING VYSYA BANK LTD.' [2020 (1) TMI 1116 - KARNATAKA HIGH COURT]Thus, in view of language employed in Section 80IA(4)(iv)(c) of the Act, the requirement contained therein is fulfilled if the assessee undertakes the substantial renovation and modernization of the existing or distribution lines and it is not necessary for the assessee to complete the same as the aforesaid provision does not contain the requirement of completion. The authorities have erred in law in adding the words 'capital work in progress' in the provision which is not mentioned and have also erred in holding that the renovation and modernization should be done in Previous Year. The aforesaid requirements are not contemplated by the provision in question. Assessee appeal allowed.
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